The model portfolio assumes $10,000 invested in each stock (unless we double-up–then it is $20,000), less $10 commission each way (TD Ameritrade rate).

For the 65 stocks that we closed out since 2006 (53 were winners) the average net gain was 30%

QAD Inc. (NASDAQ-QADA)-Recommended 6/7/2013)

Buy Price $11.80Valuation $28.27Closed down $.15 at $11.65Down 1% BUY

Dex Media Inc. (NASDAQ-XRSC)-Recommended 5/10/2013)

Buy Price $15.14Valuation $24.25Closed down $1.47 at $17.00Paulson & Co, filed a Form 13D on 5/10/2013 disclosing a 10.9% stake. They have held this stake since before the bankruptcy and merger. Then on May 14th, they filed a 13D/A disclosing another 350,000 share buy at prices up to $17.07 bringing their stake to 13%.Up 12% BUY

XRS Inc. (NASDAQ-XRSC)-Recommended 2/26/2013)

Buy Price $1.50Valuation $6.79 ( Was, $6.50)Closed down $.08 at $2.17Earnings announced in May. Pretty good. Although revenues were down to $14.5 million from $15.9 million last year, they were up from $14.2 million last year. More importantly Non-GAAP earnings were $2.2 million compared to $.2 million last year. For the six month period, Non-GAAP earnings were $4.4 million or $.16 per share. Our valuation climbed to $6.79 per share.UP 45%, BUY

Digital River Inc. (NASDAQ-DRIV)-Recommended 1/11/2013)

Buy Price $14.20Valuation $35.57 (Was $34.59, $32.20)Closed up $.23 at $17.70Earnings announced in May. Pretty good, but tempered by weak guidance. Sales were up 11% (including the LML acquisition) and they made $.33 a share on a Non-GAAP basis, up 10% YOY. Guidance for next quarter was revenue of $89-$92 million and Non-GAAP EPS of $.01 to $.04 per share. Full year guidance is $.55-$.65 a share in Non-GAAP earnings. Net cash rose to $9.49 per share. Our valuation rose to $35.57 but will likely fall to around $30 a share based on the guidance—still double the current market price.UP 25%, BUY

Daegis Inc. (NASDAQ-DAEG)-Recommended 11/30/2012)

Buy Price $1.20Valuation $4.86 (Was $4.00)Closed up $.01 at $1.16Earnings announced in March. Not bad. Sales fell from $11.1 last year to $10.4 million, but they were up slightly from last quarters $10.35 million. Gross margins were up to over 70% and net debt decreased to $13.8 million from $14.5 million last quarter. Non-GAAP earnings were $449,000 versus $252,000 last quarter. Our valuation spiked to $4.86 per share up 20% from last quarter.Looks like BlueLine Partners (a “strategic opportunities fund”) have shaken up Daegis management in January with the ouster or the CEO and CFO. The interim CEO and Chairman of the Board is a BlueLine founder. Its feeling like they are not happy with the current stock price for sure.Down 3%, BUY

Bridgeline Digital Inc. (NASDAQ-BLIN)-Recommended 8/24/2012)

Buy Price $1.24Valuation $2.19 (Was $2.35, $2.56, $2.24)Closed down $.07 at $1.01Earnings announced in May. Not great on the surface but all still looks good for BLIN going forward. Revenues fell to $6 million from $6.7 million last year and they lost $.03 a share on a Non-GAAP basis versus a $.01 profit last year. iAPPS revenue was 78% of sales up 9% from last year, recurring revenue was up 30% to $1.3 million. They also lowered their guidance for 2013 to revenue of $25-$26 million from $27 to $28 million. It looks like the reason for this is that their average deal size had doubled and it takes longer to deploy their software—which stretches out the revenue recognition period. We would recommend reading the conference call transcript where they give great detail on the business and forecast. Our valuation fell to $2.19 per share, but we still like the prospects here. It looks a bit like HSTM.Down 19%, BUY

Telecommunications Systems Inc. (NASDAQ-TSYS)-Recommended 6/14/2012)

Buy Price- $1.37Valuation $4.89 (Was $6.02, $6.72, $5.49)Closed up $.09 at $2.26Earnings announced in May. So-So. Revenues fell 5% to $95 million and they made $2.1 million of adjusted net income versus $3.2 million last year. Guidance was limited to the following quote:“Our first quarter results were consistent with our expectations, as we worked to set the stage for another strong second half,”. We’ll see. Our valuation fell substantially from $6.02 to $4.89 on lower sales and higher net debt compared to last year.Carlo Cannell, an activist investor filled a 13D in September 2012 pointing out how undervalued TSYS is and urged them to put themselves on the block. He points to a valuation done on the company as of August 29th of $7.40 to $11.81 a share. Even the low point here is higher than our valuation. UP 65%, HOLD

Aviat Networks Inc. (NASDAQ-AVNW)-Recommended 2/27/2012)

Buy Price- $2.62Valuation $9.31 (Was $10.28. $9.03, $9.37, $8.85, $8.31)Closed up $.28 at $2.93Earnings announced in May. Decent we think, but we were the only one. Revenues were $118 million compared to $112 million last year, gross margins were 29.1% and they made $1.2 million on a Non-GAAP basis versus $2.2 million last year. The current quarter included a $1.1 million inventory write-off for a bankrupt customer. Net cash per share was $1.38.Their book-to-bill ratio was less than 1 this past quarter leading them to give next quarter guidance of $105 to $115 million in revenues and Non-GAAP income of $0 to $.03 per share. Not setting the world on fire, but doing ok. Our valuation fell from the huge prior quarter to $9.31—a $1 a share more than when we recommended AVNW.Penn Capital Mgmt. filed a 13G in late February disclosing a 6.05% stake.Dimension Fund filed a Form 13G in February disclosing a 5.3% stake, Vanguard disclosed a 5.67% stake and Blue Mountain has been buying more and is now up to a 5.90% stake. UP 12%, BUY

CBeyond Inc. (NASDAQ-CBEY)-Recommended 2/28/2012)

Buy Price $7.17 ( Was $7.94 before another $10,000 added at $6.53)Valuation $28.24 (Was $28.33, $29.04, $29.59, $29.58, $29.21)Closed down $.17 at $8.42Earnings announced in May. OK. Revenue fell from $124 million to $120 million, adjusted EBITDA fell from $23 million to $21 million and they lost $600,000 compared to a $1,200,000 loss last year. Our valuation fell a few pennies to $28.24.Guidance for 2013 was unchanged- revenues of $475-$485 million, adjusted EBITDA of $75-$82 million and free cash flow of $15-$20 million.Penn Capital Mgmt. filed a 13G in late February disclosing a 5.55% stake.$80 million of EBITDA, $.68 a share in net cash and a $230 market cap. Cheap.UP 18%, BUY

MRV Communications (Pink Sheets-MRVC.pk)

Valuation $27.15 (Was $31.80, $34.60, $28.60, $41.20, $43.20 (after $9.50, $6.00 and $1.40 special dividends), $52.40, $55.80)Buy Price October 7, 2011- $8.50 ($25.40 before special dividends)Closed at $9.00 down $.04Earnings announced in April. Not bad, but not great. Sales were $46 million up slightly from $44.7 last year. They lost $3.1 million pre-tax which included $1.6 million of litigation costs and $400,000 of share based compensation (vapor cost). Net cash was $4.59 per share and our valuation was $27.15.Lloyd Miller disclosed a 6.9% stake in February.The 20 for 1 stock split happened in December, so all the share information has been adjusted.Raging Capital bought another 1.6 million shares in the first week of December at $10.80 bringing their holdings to 20.1% of the company.Still trading at less than ½ our valuation. UP 5% BUY

Sigma Designs Inc. (NASDAQ-SIGM)-Recommended 7/11/2011)

Buy Price-$8.49Valuation $8.24 (Was $13.05, $10.67, $8.41 $12.10, $13.40, $16.02)Closed up $.51 at $5.10Next earnings due out Wednesday, June 12th after the market close.Raging Capital filed a 13D/A last week disclosing the purchase of another 350,000 shares at prices up to $4.68 a share, bringing their holding to 8.1% of the company.Earnings announced in March. They stunk up the place. While sales were up to $44 million from $36 million last year, they lost $36 million or $1.18 per share. Cash fell again to $2.51 per share (it was $5.40 when we recommended SIGM) and our valuation plunged to its lowest level ever. But wait, there’s more…..they are projecting next quarter to be about breakeven on $49-$52 million in sales. The market looked past this past quarter and the stock rose. We will be watching this one very closely and may sell at any time.Down 40%, HOLD

Mitel Networks (NASDAQ-MITL)-Recommended 7/6/2011)

Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)Valuation $12.26 (Was $13.10, $10.92, $13.92, $12.81, $15.28, $14.04, $10.39)Closed up $.08 at $3.67In addition to refinancing their debt out to 2019-2020, MITL announced earnings in February. Revenues were down to $142 million from $150.5 million last year and Non-GAAP net income was $.23 a share versus $.21 a share last year. Our valuation fell a bit to $12.26 a share-still more that 3X the current price. UP 21%, BUY

Concurrent Computer (NASDAQ-CCUR)-Recommended 2/4/2011)

Buy Price-$4.58 (Was $5.08 before $.50 special dividend)Valuation $16.26 (was $16.20, $15.37, $13.53, $15.85, $14.13, $11.38, $14.04, $18.54, $15.99)Closed up $.45 at $7.99 (including dividends)Pays $.48 annual dividend.Whoo-hoo! CCUR announced that they are doubling their current dividend to $.12 per quarter.We have collected $.24 in dividends so far (excluding the $.50 special dividend which reduced our basis).Earnings announced in April. Pretty good we think. Revenues were $16.9 million, up from $16.3 million last year. They had a profit of $937,000 ($.11 per share) versus $337,000 last year. Net cash was $2.52 a share and our valuation rose to $16.26 per share.Singer/Miller duo own 12.1% of CCUR.UP 75%, HOLD

Extreme Networks (EXTR-Recommended 3/22/2010)

Buy Price-$3.18 (Was $3.04 before adding another $10,000)Valuation-$6.58 (was $6.99, $6.97, $7.46, $6.31, $7.01, $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)Closed at $3.47 down $.09Earnings announced in April. Not bad. Revenues were $68.2 million down 7% from last year. They lost $2.2 million versus a profit of $2.4 million last year. On a Non-GAAP basis they made $3.3 million versus making $3.8 million last year. Net cash was $189 million or $2.03 per share.Guidance for next quarter is revenue of $73-$77 million of revenue and Non-GAAP net income of $4-$7 million. Our valuation fell to $6.58 per share, double the current price.Vanguard filed a Form 13G in March disclosing a 5.21% stake, Wellington disclosed a 6.3% stake and Soros upped his holdings to 9.85%..Starboard owns 8.8% and Blackrock owns 5.4% of EXTR.UP 9%, BUY

Gravity Company Ltd. (GRVY-Recommended 1/18/2010)

Buy Price- $1.45 per ADS (Was $1.68 before double up)Valuation $4.14-(Was $3.65, $3.41, $5.52, $5.00, $5.39, $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)Closed at $1.13 up $.06Gravity reported their Q1 results on May. Revenues were down YOY by 28% to $10.8 million and they lost $1.5 million or $.21 per share. By far the worst results since we have owned GRVY. Cash per share fell to $1.69 ($47 million). Not much good news to report although it looks like Rangarok Online is doing OK in Korea and they re-launched it in China in February.Still trading below cash value, but operations are not looking robust at all. We may have to dump this one, but will hold on for a bit longer to see if they can turn things around. It would be a shame to have to sell this below their cash value.Down 22%, BUY

OB-abies (Bulletin Board Listed Stocks)

As proven by OPTIO, patience is necessary with these stocks.

ARI Networks (ARIS.ob-Recommended 8/19/2006)

Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $6.14 (was $5.97, $6.21, $6.13, $5.82, $5.81, $5.72, $5.65, $5.39, $4.86, $5.60, $5.73, $5.54, $5.74, $5.96, $4.72, $5.19, $5.66, $5.63, $5.61, $5.71, $5.49, $5.34, $5.03, $5.28, $5.28, $5.21)Closed at $2.51 down $.19Next earnings due out Tuesday, June 11th before the market opens.Michael D. Sifen, Inc. filed a Form 13G last week disclosing a 9.9% stake in ARIS. From Google, it appears this is a contractor in Virginia. Must have been a participant in the recent private placement.ARI announced in May that 50 Below revenues are up 25% YOY due to renewed dealer enthusiasm. Sounds good!Wynnefield Partners filed a 13D/A in April disclosing purchasing another 50,000 shares at $2.50, and now have a 9.95% stake (1.2 million shares) in ARI.We are almost up to 50% of our valuation!Earnings announced in March. We saw transitional results as a result of integrating 2 acquisitions including 50 Below which closed November 28, 2012. Revenues were up 36% to $7.5 million but expenses were up 39% excluding $600,000 of acquisition related expenses. As a result pre-tax loss was $206,000 versus income of $122,000. How much of this loss was due to additional integration expenses was not disclosed.At the same time ARI announced a private placement of stock for $4.8 million at $1.50 a share. They will use this to pay down the 14% debt they took on to buy 50 Below. With all this and only a partial quarter of 50 Below sales, we estimate the current valuation at $6.14 a share. We don’t expect much in the way of earnings over the next 2 quarters as more integration costs will continue for a while. So while this acquisition may be a game changer, we are only in the 3rd inning. UP 56%, HOLD, Still a Huge valuation gap here.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)

Buy price $.27 ask, Valuation $1.07 (Was $1.14, $1.17, $1.34, $1.34, $1.37, $1.36, $1.23,$.91, $1.21, $.71, $.83, $.88 $.96, $.93, $.75, $.85, $1.57, $1.40, $1.29, $1.38, $1.31, $1.38, $1.29, $1.42, $1.28 $1.13, $1.05, $.82)Ask price $.30 closed at $.30CTIG announced Thursday that they had hired Duff and Phelps as their independent financial advisor. Guess the Board decided they need to get a fairness opinion to keep down the damages on the lawsuit.Earnings announced in May. Not good, but I expected worse given they are trying to buy out the company on the cheap. Revenues were $3.885 million versus $.368 million last year. Gross margins held firm at 73%, but they lost $443,000 compared to a profit of $25,000 last year. Cash per share fell to $.06 and our valuation dropped to $1.07—still triple the current trading price. Birbeck and Fairford Holdings made a non-bnding offer to buy CTIG in March for $.29 a share. The company formed a special committee to evaluate the offer. Hopefully they will find somebody else who will pay fair value—or at least close to it.UP 7%. HOLD

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Wow, a share holding cash of 162% of it's actual price? No expert on shares m'self, but that makes no sense. They could liquidate the company and stock holders make an immediate 62pc gain.GreenWorld Farmland Investments